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>> leapfrog. >> karen. >> nhp. >> stick with those big names, fizer. >> thanks for watching. back here again at 5:00. "mad money" with jim cramer starts right now. "mad money" starts here right now. >> i'm jim crakramer and welcomo my world. >> you need to get into the game. >> they are nuts. they no nothing. >> i like to say there is a bull market somewhere. >> i'm cramer. welcome to "mad money." i'm trying to educate you. so call me at 1-800-743-cnbc. the rulie ining on the field is eversed and the play is ruled a touchdown for the bears. that is how it went today with
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the bulls truly in the match almost a whole game for a nasty reversal caused by protesters and they drove the averages down. nasdaq claiming 1.36%. i don't think the sellers were wrong as the refs. there are some aspects to this decline. it was bad. but there are aspects that are less than meets the eye. in fact, i think what didn't happen given the fundamentals and the shocking spanish ran core. here is what i would have expected to happen. crushing the dow jones by 2%. causing another decline to hit including federal express which is off three and intell which
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had two points to close at three. which are still reeling from their blogs. there is only one problem with that. it didn't occur. i would have expected it to happen but it didn't. caterpillar downed and that did cause this to fall $3 and change. cater pilar should have gone down five. and then it slashed last night. federal express kept falling and then reported a worse quarter. and no more. even as the situation is not as good as we thought. last week and one of the oddest things that has happened, 3m fied e fied ee eed guided down. it went up when announced as
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negatives and it barely came down. intell came down but not much more here. the decline has been stemmed by 26 cent decline. i don't know. i don't think it is worth crying about. come on. it is hanging in there. one that i would think would continue to send it down. bed bath continued to send it down and bbby was down today. i figured nfc would be at 60 today. i was too bearish. it is hanging around at $65. i said that you should sell it. so far, it wasn't such good advice. i spent a lot of time talking about the stocks. i also tried to show you
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patterns, patterns that i have seen in years of trading and investing. they have worked in environments in the past. the stocks didn't rally on the weaker projections. more important is the fact that it didn't get crushed as much as it should have. the reaction isn't that note worthy given how wild the stock is. why hasn't it's been benign? remember, we were at 11,000 not that long ago. think about it. instead of the 13,000. we were down 11,000. that is where we are. why were these stucks down before the rise broke out? it hooks like we would be finishing higher for the day. this reminds me of when the
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greeks went crazy. i think the declines might not have occurred and it pointed to a couple of things. and it makes the market stronger than you would expect and maybe like boundy and not a flood. first they lag their benchmarks and they need to make up ground. the hedge fund managers are expected to beat the s&p 500. where you pay teeny tinie fees. what is the point of giving a manager a share of the profits if they can't do as well as the static machine? as the year ticks by, they are getting frantic. they have to buy they can't make
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up the performance. they don't want to pay up for merchandise. that leads to under performance. and even the most knuckle headed partners looks over the performance. but when you get a price break like fedex or norfolk southern, you find the managers take a break from the price break. although my charitable trust is beating the market. we felt like we had a chance to buy a quality retailer. they might be doing it too. these buyers are as aggressive as they can be.
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so let's consider for a couple of reasons a cushion, a lot of people expected they could roll back a couple of thousand. that is a fancy pants reason of showing a difference. the industrial stocks which are the real targets of today's down draft, they are $550 points behind the average. they are much lower than the average stock and that is attracting bargain hunters not sellers. i'm trying to come up with something different. i was thinking with the fiscal retaining wall. you must never underestimate the power of positive thinking, when
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i scan the estimates, i see that they are supposed to rise next year. i can't recall seeing a company with estimates up to 2013. so something will be better next year. don't you think your company will be better than next year? >> that has some well, everybody else it makes sense. perhaps the us or europe because their stock markets have been rallying because they have been non-st non-stop, these could bring about a better 2013. money managers are representing those that are doing better on the stocks that should be drubed and drubed and drubed after getting the initial hit. yes, the news of the day, it is
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the lack of follow through in the stocks themselves the next day and the lack of negative pin action to the overall market not just the industrials. so here is the bottom line. when the lead industrial transport continues go down you expect a bear or spare if not a strike. instead you are scoring a five or six. it is by no means bullish bowling. it is that. but you know, that would mean gutter balls. unless you get nfl replacement refs to previd over bowling too. it is not to preside over the bears by any means either. >> is this a good time to buy carnival stocks and is it a good stock to hold on to and will the constant legal problems affect it any?
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>> no, they won't. she would say carnival cruise, and now you want to go into it? what were you thinking. the answer is no, you can't. the time to buy that was in that terrible tragedy and the aftermath not now. the rule has been made. i need to go to os wawald in florida. >> i have a question about staples. they are thinking about closing a couple of stores here. i was wondering, would it be a good time to take a position now and see how this pans out. they announced this and it was the first time that they looked at this. i don't know. i don't want to give into hyp
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hyperboly, but i'm getting tired of people saying this is going to be different. i'm mr. pright side. call me that. maybe the bears will be controlling the game today. yes. no, it was look a win for the bears. but i have to tell you something, to me, i'm calling penalties and i'm saying let's say it was a push. "mad money" is going to be right back. >> coming up check's in the mail? paychecks took a hit today after reporting revenue short on the street's expectations. but could this start turning into a payday for investors? >> don't miss it. >> and later, rotten apple? >> the technohas been a driving force but could it be coming to an end?
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>> tonight kramer finds out if apple's run is done for just begun on a new edition of off the charts. plus seeing red. redhat has been making green for investors in 2012. after reporting the stock is in the red. should the open source powerhouse no longer get your tip of the hat. that is just ahead all coming up on "mad money." >> don't miss a second of "mad money." follow at jim kramer on twitter. have a question? tweet kramer, hash tag at tweets. call us at 1-800-743-cnbc. miss something, head to "mad mone
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finally mitt romney has something to feel good about. paychecks gives a specific read about hiring in america. i don't want to be glib here, but last night they are facing a tough environment but the quarter wasn't terrible. revenues came in light. i thought that was the important key metric. however, the growth here seems to be decelerating. we need to get a handle on the growth situation.
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>> i red three these various downgrades, it seems like they thought their pay roll numbers were this number that we cared so much about which was the actual 2.2% revenue number and suddenly it didn't matter. >> we thought it was a good start to the year for us. >> what do you think was more of a headwind for you?
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>> well, i think it is about new business start-ups. we think that is going to be new business start-ups now. >> this is a terrific performer. the analysts who are negative. p payroll service revenues were plus one percent. >> we expected this.
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timing of this, we feel clients are hiring and we feel there are positive signs. and we feel whether it is pay roll, or 401(k) and whether they are out there selling us and getting new revenue for us. that is right. we introduced a new sales force that is going after the market. we are feeling good about the obopportunities that are out there. some of the bears are saying, the stock went down today. i think to get the ceo on. to answer these things is better
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than to say is romney going to create jobs. they did say listen, the bears are going to be mature and saturated. >> when you get on pay roll, we sell you the other products. that is still the both engine and we have a sales force that we are going to do it. >> i have a couple of businesses that i use paychecks. they are saying the same things. i don't want to hire anybody. i'm stopping that.
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is that part of the problem? people who would put someone on the pay roll to do something and they are the ones holding back or someone needing a loan that is not getting it that is holding back? we don't feel there is much holding back. i think that the election as we talked before is going to put a damper on things until small business, health care is headed and the consumer confidence numbers this morning. that is all driving small business. we feel pretty good that after the election. maybe we will pick up real speed. >> if you come in, let's say, let's say six weeks ago versus today, what did you see in your run that is better now versus what it was? >> one would be the checks per
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client. so again, we thought that would moderate. we thought that would start to come down. this is the longest dprad gradual increase. this is a slow continual improvement. second the retention is still better. improving client retention, less jumping and not leaving us. third i would say the client base saw improvement as well. the net gain is improving and we are seeing clients continue to grow and take 401 k. we have the largest insurance agency.
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thank you marty mussi. >> thank you for having me. >> you pu the dividend together with the price performance and you get the stock that is doing quite well. that is what he is giving you. after the break i'll try to make more. >> coming up, rotten apple? >> the technothat has been the driving force behind the market's move higher. tonight kramer finds out if apple's run is done or just begun on off the charts. and later, seeing red. software supplier redhat has been making green in 2012. but after reporting stocks in the red, is this your opportunity to buy? cramer's exclusive is just
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what should you do with apple after the beating it has taken for the last couple of days. if you are thinking of buying a text document for a couple of days. after apple $17.25 crushing today on top of yesterday's
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hideous loss. tonight we are going to go off the charts. we are going to figure out where apple's stock might be headed and what you should do about it. chief strategist author and before we get into the details i want to point out that when it comes to apple, back on may 22nd, the stock had experienced a nasty pullback just as this one. he suggested that apple is going much higher. last week apple peaked at $500 bucks. he is saying we have to listen, right? the stock hit a huge milestone last week. he said that the stocks like to shake the tree.
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it stands to reason that is why the stock is pulling back right now. you need to know how it has made sense to buy the stock in the past. why don't we go to the daily chart. remember when apple reported in late july when the company missed the numbers? that pullback stopped when apple hit a solid four. and after that, it was off to the races. if you look at the course of this r this rally, it shows you how important this is. so many have tweeted me. the first pattern was when apple traded into the gap post other thanning earnings july 27th.
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showing power and tremendous demand. it turned on people and it has been put on sale because it had blown up after the quarter. the second buying pattern when apple cleared $618. a higher high. because it came out ahead of head and shoulders. after that you caught another leg higher and a third pattern when apple took out the high of $644 on august 17th. this is usually a sign that the stock is going higher. and the 4th pattern came the day the iphone 5 was introduced. and buyers took control after spending the day hanging on or above the support. usually the bears sell the events but they couldn't keep
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the stock down and it went higher. it was a big big tell. remember, he is doing short-term work. some of you want that. the stock seems poised for a bigger pull back. the stock might have to pull back further. check out this chart of apple going back to last december to see where redler thinks apple could be headed. the stock is held above 21 day average. this is an ultrashort measure. lot of technicians don't like it. it is too short. apple had tested that level once.
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it was below the crucial zone. and right now it looks like it might be failing the test. short sellers he thinks could get trapped here and the stocks could go higher. lots of stocks with serious momentum have held with this level. google pulled back to the 21 day moving average and that average held. and since then it has been on fire. that is a rocket ship. so if apple holds, and he thinks it could follow in google's food steps. what if it intensifies? which the stock is below right now. let's go back to the chart.
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the stock's next form of support is the moving average. that is the red line. and that is around 644. that coincides with the high around ape rail trading side ways. that is not that big a risk. first it is looking like the stock will have to pull back. we don't know if this will be a little pull back or a big one. you have to hold the zone. right about where the stock went out today. if it can rebound, that is as good as saying all aboard. however, if it is below 644 he
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says it will lose it's quality and a good mojo. if you want to gain apple right now, the charts suggest that while the stock is due for a pull back. there is reason to believe that it is due for a pulldown. until one of those things happens, redler thinks you should wait before you buy the dip. when it comes to apple, the guy has the short-term trading hand. let's go to bob in california. >> hi jim, do you think in tell has the juice to make a move into the smartphone and tablet term of the market? >> i'm never going to sneer at a 4% yield. i think they can do the smartphone but apple with this fight with samsung, apple has to
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say we are done with samsung and we are switching the business with samsung. until they do that you are flogging a dead horse. is apple unstoppable? tonight's chart is cutting to the core. if you want to take a bite. he is saying wait for that pull back. look, i'm saying stop it already. get long as it comes in. okay. it is an investment for me. for him, it is a trade. stay with cramer are. >> coming up, seeing red. redh redhad has been seeing red. is this your opportunity to buy. or should the open source power house no longer get your tip of the hat. it is just ahead. [ horn honks ]
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hey, it's sandra -- from accounting. peter. i can see that you're busy... but you were gonna help us crunch the numbers for accounts receivable today. i mean i know that this is important. well, both are important. let's be clear. they are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows it's better for xerox to help manage their finance processing. so they can focus on keeping the world moving. with xerox, you're ready for real business. so they can focus on keeping the world moving. one is for a clean, wedomestic energy future that puts us in control. our abundant natural gas is already saving us money, producing cleaner electricity, putting us to work here in america and supporting wind and solar. though all energy development comes with some risk, we're committed to safely and responsibly
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ili ili it is time for the lightening round.
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you play this sound. that is the final score. and the lightening round is over. are you ready? it is time for the lightening round and i want to go to charles in missouri. >> booyah jim. i want to get your take on key energy services. fell 12.5% today. >> these are speculations on the ideal that i'll is going to go higher. they are core options on oil. if you think oil is going to go down they are going to go down. i like heck. heck is the one i'm going to buy. >> jason. >> las vegas. i was wondering what you thought. is it still a good time to get long? >> i talked about how this market is not giving up the ghost. after this great run this is one
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to buy on weakness and i don't know if you are going to get any. thomas in new mexico. >> jim, my stock is fsc. >> i have so many banks that have not had a run like this. i'm going to send you to key bank at 8:00. i like it a lot more than your name. eric in colorado. eric. >> a big booyah to you jim, and thank you for helping the little guy. what's up? >> well, there is still negative over hang from the pricing for their services is improving rapidly. >> go for the one that has less liability and that would be nsv.
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i think that stock has better fundamentals. chris in new york. chris? >> big booyah to you jim. company's corrections corporation for america. csw >> this is a contract company. and i have not been good at calling that group. i have to do more work and tell you the contracts are good. that is the way i have to play it. i have to do more work and that is the conclusion of the lightening round. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other,
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which isn't rocket science. it's just common sense. from td ameritrade. it's just common sense. i'm bara ck o bama and i approvemon sense. romney: "it's time to stand up to the cheaters" vo: tough on china? not mitt romney. when a flood of chinese tires threatened a thousand american jobs... it was president obama who stood up to china and protected american workers. mitt romney attacked obama's decision... said standing up to china was "bad for the nation and our workers." how can mitt romney take on the cheaters... when he's taking their side? if we want to improve our schools... ...what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ...nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students.
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let's solve this.
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as the cloud peaked? even though everything related to the personal computers, still have a couple of themes going. last night rht open source softwa software company reported that many analysts were disappointing.
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billings came in light rising 15% every year. and management had to reduce the four year revenue. when you look at it like that. you can understand why the stock got hit today. 4.28%. it was a down day here. it doesn't look like anything is wrong with it. when you look at the numbers, they look darn good to me. they are getting hit as they convert weak currency. they plan to hire 250 people per quarter this year and that costs money. that is what i call high quality problems. they want to spend it rather than hoard the money. redhat is up 33% for the year. it is inexpensive stock. let's check in with jim
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whitehurst and find out more about the quarter. welcome back to "mad money." >> jim, it is great to be back. how are you? >> pretty good, how are you? >> doing well. i read through these notes. woe is me. red hats, and i want to point out to our viewers, you once had another job before this. it was a difficult job. is your business falling off like that did? >> oh, our business is going fantastically. we continue to grow. on a constant currency base sis over 20%. how does that compare to delta when you were chief operating officer? >> it is a fun, fun diz to be involved in. it is a tough business to be
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investing in. that is a tough business. >> the reason that i pointed it out. i think there is a miz csconcepn in the buying of the companies. you have to do that in order to maintain the growth rate and i don't understand what the analysts want. it would be disappointing if you did what they wanted you to do. >> in this case we were light on earnings, but all of that was based not on investing in the companies, but on the one-time costs on closing the deal. that represented 100% of the myths. so we are invested in the business but we continue to have solid operating margins and our cash flow grew by 38%. we are significantly increasing
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our return to shareholders. >> every business i have been involved in, it is the most significant peas of dapiece of . this was the slowest growth in 12 quarters. what do you say? >> i would say, we said back in march that we were going to relatively reduce our emphasis on services. our services have grown as fast as those in the business. it puts us in touch with those who use our software, and so we said this year, we were going to reduce our growth rate in services which have a 36% gross margin to emphasize working with partners to sell our software
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that has a gross margin. they grew at 22% year over year which was a solid growth rate in this environment. and our services we bill after the fact and so that did pull down our billings growth rate, but we think it is well worth it and we still have 22% growth in our subscription business. >> these are all new businesses how are they integrating and what will they do for you in 2013? >> we bought about a year ago and we released the product redhat storage based on the technology in june. so it has been on the market and we have great results. we signed a six figure deal in the first two months.
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as you know, we talked about the beauty of the subscription model. when you first buy a business. even the six figure deal that we sign, has revenue. so, it is right now has huge, huge, huge potential. we have a significant backlog of demand in storage. we've expect it to do a lot in the billings and bookings. >> i'm sorry. i wanted you to address directly in the time i have left that you have won huge contracts including some taken away by others that have banks. you are winning business and you did the partnership thing. you are taking business away from major companies. for the first time we had an 8 figure deal. so, what i have illustrates, the
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dollars are nice but we are becoming very, very strategic for a software spin that is a big big big number. we are getting deeper in relationships with some of the largest banks in government agencies in the world. >> look, jim, thank you. i think that because your stock moved up so much. people were taking shots. thank you jim, president and ceo of red hat. talk to you soon. >> stock is up huge. it is up 30% more. this market got really great. and but remember this is still a big growth business and i don't like a lot of technology stocks here. this one can hold up even as i'm
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sure it could go down for days because it didn't blow away the numbers.
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good trading can be annen troy point where you make your first bubuys.
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you don't want that first buy to be too high. you want to feel if you are going out on a big limb and making good money after bad moneystiti decision. they have missed the point entirely. and none more so than my suggestion yesterday that google might have been a better buy than apple. i didn't say i liked the stock more. i didn't say that i wanted to sell apple. i remain a believer in apple and i own it for my trust and it might be time to do buying. but as far as buying it at $700. the choice is clear. there were a multitude of sellers that weren't finished and they weren't as complete as the google sellers were. google has a way to go.
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apple has come down hard and that is what i was worried about. through this suggestion a correct one already, google may be at this moment a better stock to buy than apple. it is coming across that it is finished and the only game in town is google. both of these stocks remain relative but apple has had a huge run. one that produced huge expectations that while i think will be met, once all of that preordering is processed, right now they seem aggressive. but it is paying the way. meanwhi meanwhile, they said it was cheap and i have liked apple and said it was cheap. i'm speaking of the notion of which stock has buyers and
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sellers that are aggressive. they may be willing to pay higher prices and i have to make that judgement if i make a correct entry point. and i'm not going to tell you that the train has left the station. but if i think a stock is going lower. i'm not going to tell you to catch a falling one. this isn't politics. it is investing. my goal is and always has been to get you to make as much as possible. if i can time it better that is all i'm trying to do here nothing more but nothing less. i know that is what is expected of me. what i want you to learn and now how to do yourself even if you think i'm returned on apple and want you to plow into google as
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if i've never liked the stock on the show. stick with kramer. well, if it isn't mr. margin. mr. margin? don't be modest, bob. you found a better way to pack a bowling ball. that was ups. and who called ups? you did, bob. i just asked a question. it takes a long time to pack a bowling ball. the last guy pitched more ball packers. but you... you consulted ups. you found a better way. that's logistics. that's margin. find out what else ups knows. i'll do that. you're on a roll. that's funny. i wasn't being funny, bob.
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i know. the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪
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for real. ...that make a real difference. when we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule. seconds away on "the kudlow report". the union is the main culprit and fran tarkinton is going to give us the main scoop
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